BNB Smart Chain feels impact of sandwich trading bots against human traders

BNB Smart Chain is attracting sandwich attacks, around the same time DEX activity picked up in November. Binance’s native chain remains slower compared to Solana, but the increasing interest in crypto trickled down to trader and bot activities.

BNB Smart Chain has become the site of sandwich attacks, which are prevalent on top chains like Ethereum and Solana. A significant number of users have found themselves sandwiched by bots on the network, as both DEX activity and attacks increased in the past months. 

The recent spike in bot attacks coincides with an all-over growth of DEX activity. Almost all DEXs on the chain saw sandwich bot activity. PancakeSwap accounts for more than 88% of bot attacks on the BNB Smart Chain.

BNB Smart Chain aims to protect itself through novel block-building mechanisms. More than 92% of blocks are created by block builders, presumably to achieve a fair distribution of block space. However, even with deliberate block-building, sandwich attacks are still included in those blocks.

During the 2021 bull market, ApeSwap briefly became the main hub of sandwich attacks, which later spread to PancakeSwap and smaller DEXs.

Almost no market is safe from attacks on its most active pairs, or specific tokens. In the last weeks of November, the bot attacks also affected the Uniswap version on BNB Smart Chain, which led to a record number of swaps being sandwiched. 

Daily volumes on all decentralized markets grew past $16B, with many of the DEXs having a BNB Smart Chain version.

Bot transactions sandwiched trades in 35.5% of blocks

Up to 35.5% of all BNB Smart Chain blocks contained sandwich transactions, a record rate. Those attacks have a small, but growing share of DEX trades. In November, up to 43,400 traders were affected by MEV bots and sandwich attacks. 

There were 645 active bots unleashed on the network, taking an estimated $1.32M from $9.23 in DEX volumes. In comparison, Ethereum only had 83 bots active as of December 3, all attacking specific contracts and tokens tied to DEX hubs. For BNB Smart Chain, the attacks select a few top pairs. They may also threaten trending tokens and random assets.

The absolute record in sandwiched traders is 48,470 from January 2024. At this current level, the stats are closing in on the record. The biggest share of attacks happens on random tokens, with no particular target. 

Some pairs get habitually sniped by sandwich bots. Those pairs include USDT-WBNB and USDC-USDT, while WBNB and USDT are the most sandwiched assets. The monthly volume of sandwiched pairs varies, but traders can check the most common targets for attacks.

For now, BNB Smart Chain lacks real-time monitors on trending attacks. 

Sandwich bot attacks are often counted among exploits, as they often rug-pull big traders attempting to cash out on trending tokens. BNB Smart Chain does not hold the most valuable assets, though it may contain copy tokens or its own ecosystem of assets. As of December 3, BNB Smart Chain once again saw Simon’s Cat (CAT) trending, 

Sandwich attacks are not random, but target trending valuable tokens, especially ones with the most active trading. Bots get activated when traders try to find gems among DEX tokens, often going after significant value. 

BNB Smart Chain goes through a slow recovery

BNB Smart Chain has a mempool, which is visible through API, and bots can glean information about DEX swaps. The problem has existed for years, and no viable solution has yet been found. Bots only recede when overall trading slows down, as during periods of stagnation or bear markets. 

BNB Smart Chain has more than 1M daily active users, though the types of activity are shifting. The activity only gradually recovered in the past three months, as BNB Smart Chain was slow to grow its DeFi value. 

As of December 3, BNB Smart Chain holds $5.48M in value locked, lagging behind Ethereum and Solana. However, the persistence of sandwich attacks suggests the protocol still carries trending assets. The increasing activity may also boost the native BNB token, which is currently trading at $649.43. 

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